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Fuwei Films Announces Its Fourth Quarter & Full Year 2010 Financial Results

Friday 25. March 2011 - Annual Revenues of RMB 501.5 million (US$ 75.8 million) increase 56.3% compared to the same period for 2009.

Fuwei Films (Holdings) Co. Ltd. (Nasdaq: FFHL) (“Fuwei” or the “Company”), a manufacturer and distributor of high-quality BOPET plastic films in China, today announced its financial results for the fourth quarter and full year ended December 31, 2010.
Financial Results 2010 Highlights
— Revenues for 2010 were RMB 501.5 million or US$75.8 million, compared
with RMB 320.7 million in 2009.
— Net income for 2010 was RMB 40.8 million or US$6.2 million, compared
with net loss of RMB 19.0 million in 2009.
— Basic and diluted earnings per share for 2010 was RMB 3.12 or US$0.47,
compared with basic and diluted net loss per share of RMB 1.45 in 2009.
— Cash and cash equivalents as of December 31, 2010 was RMB 171.2 million
or US$25.9 million, compared with RMB 26.8 million as of December 31,
2009.
“2010 was a profitable year for Fuwei with significant increases in both revenue and net income, which was mainly due to higher demand and sales prices,” said Mr. Xiaoan He, Chairman and CEO of Fuwei. “We believe that we are well positioned to leverage our market leadership and competitive advantages. In 2011, we plan to continue to focus on our R&D, expansion in global markets and the acceleration of our thick-film production line construction.”
Fourth Quarter 2010 Results
Revenues for the fourth quarter of 2010 were RMB 173.5 million or US$26.2 million, compared with RMB 84.0 million in the fourth quarter of 2009, which was an increase of RMB 89.5 million, or 106.5% compared with the fourth quarter of 2009, mainly due to the significant increase in the price of goods sold.
Sales of specialty films for the fourth quarter of 2010 were RMB 34.7 million or US$5.2 million, or 20.0% of total revenues, compared with RMB 12.2 million or 14.5% of total revenue in the fourth quarter of 2009, which was mainly due to higher demand for specialty films and higher sales price of goods sold.
Overseas sales for the fourth quarter of 2010 were RMB 36.1 million or US$5.5 million, or 20.8% of total revenues, compared with RMB 11.1 million or 13.3% of total revenues in the fourth quarter of 2009, which was mainly due to increased overseas demand and higher sales prices.
Gross profit for the fourth quarter of 2010 was RMB 57.6 million or US$ 8.7 million, compared with RMB 10.4 million in the fourth quarter of 2009. Gross margin was 33.2%, compared with 12.4% in the fourth quarter of 2009. The increase in gross profit was primarily due to the significant increase in sales prices.
Operating expenses for the fourth quarter of 2010 was RMB 20.6 million or US$ 3.1 million, compared with RMB 10.4 million in the fourth quarter of 2009. This increase was mainly due to the increase of R&D expenses, accrued class action indemnity and related legal fees, and overseas sales expenses.
Operating income for the fourth quarter of 2010 was RMB 37.0 million or US$5.6 million, compared with operating loss of RMB 8,000 in the fourth quarter of 2009.
Net income for the fourth quarter of 2010 was RMB 25.4 million or US$3.8 million, compared with RMB 0.5 million in the fourth quarter of 2009. Basic and diluted earnings per share was RMB 1.95 or US$0.29, compared with RMB 0.04 in the fourth quarter of 2009.
2010 Full Year Results
During the fiscal year ended December 31, 2010, our revenues were RMB 501.5 million or US$ 75.8 million, which is an increase of RMB 180.7 million or 56.3%, as compared to the same period for 2009. The significant increase in revenue was mainly due to the increase of average unit sales price.
In 2010, sales of specialty films were RMB 88.0 million or US$ 13.3 million, or 17.5% of our total revenues as compared to RMB 34.0 million and 10.6% in 2009, which was an increase of RMB 54.0 million or 158.7%, as compared to the same period in 2009. The increase was mainly attributable to the increased demand for high value-added packaging. Furthermore, the increase of the sales of some specialty films, such as dry films also attributed to the sales increase.
Overseas sales were RMB 103.7 million or US$15.7 million, or 20.7% of total revenues, compared with RMB35.6 million or 11.1% of total revenues in 2009.
Gross profit in 2010 was RMB 130.6 million or US$19.7 million, representing a gross margin of 26.0%, an increase of RMB 106.0 million or 430.4% compared with RMB 24.6 million or gross margin of 7.7% in the same period of 2009. The increase in gross margin was mainly due to the increase of sales price that was much higher than the increase of unit price of cost of goods sold.
Operating expenses during the year ended December 31, 2010 was RMB 70.9 million or US$ 10.7 million, which was an increase of RMB 29.8 million, or 72.3%, as compared to the same period for 2009. This increase was mainly due to the increase of R&D expenses, accrued class action indemnity and related legal fees, and overseas sales expenses.
Other expenses during the year ended December 31, 2010 was RMB 8.9 million or US$ 1.3 million, which was an increase of RMB 2.4 million, or 37.0%, as compared to the same period for 2009. The increase was mainly due to bank loan interest increase of RMB 2.3 million.
The effective tax rate was 21.8% and 17.7% in 2010 and 2009, respectively. The higher effective tax rate in 2010 was primarily due to higher profit in 2010 and the carryforward net loss for the period ended 2009.
Net income for 2010 was RMB 40.8 million or US$6.2 million, compared with net loss of RMB 19.0 million in 2009.
Basic and diluted earnings per share for 2010 was RMB 3.12 or US$ 0.47, compared with basic and diluted net loss per share of RMB 1.45 in 2009.
Net cash provided from operating activities was RMB 98.6 million or US$ 15.0 million for the year ended December 31, 2010 as compared to RMB 8.0 million for the year ended December 31, 2009. The increase was mainly due to the increase of net income and increased advance from customers.
Cash and cash equivalents on December 31, 2010 was RMB 171.2 million or US$25.9 million, compared with RMB 26.8 million as of December 31, 2009.
2010 Highlights
Our subsidiary, Fuwei Films (Shandong) Co., Ltd. (“Shandong Fuwei”), received the following awards and certificates, each of which, we believe, is an indication of our achievements, the quality of our products. We believe that this will make us more attractive to our potential customers and as a result a more competitive company both in the local and international markets.
In June 2010, Shandong Fuwei was designated as an A-Category taxpayer by the National Taxation Bureau and the Local Taxation Bureau of Shandong Province, and Shandong Engineering Technology Research Center by the Department of Science & Technology of Shandong Province.
In January 2011, Shandong Fuwei was granted the “Award for Cooperative and Innovative Manufacturing, Study and Research of Small and Medium Enterprise (“SME”)”, and the “First Award of Private SME Innovation of Shandong Province” by SME Productivity Promotion Center of Shandong Province, and SME Innovative Committee of Technological Promotion of Shandong Province. Our brand “Fuwei Films” was selected as one of the “Famous Shandong Brand” by Shandong Provincial Quality Supervision Bureau; and the “Scientific Innovative Enterprise of Shandong Province” by the Department of Science & Technology of Shandong Province.